The upcoming discussion will update you about the difference between job costing and process costing.

Difference # Job Costing:

1. Production is against specific orders.

2. Costs are determined for each job separately.

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3. Each job is separate and independent of others.

4. Total cost of a job is divided by the number of units produced in the job in order to calculate unit cost of a job.

5. Costs are compiled when a job is completed.

6. There are usually no transfers from one job to another unless there is a surplus work or excess production.

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7. There may or may not be work-in-progress at the beginning or end of the accounting period.

8. Proper control is comparatively difficult as each product unit is different and the production is not continuous.

9. Job costing requires more forms and details regarding materials and labour due to the need for the allocation of labour to so many orders and material is issued in bulk to departments.

10. Job costing is suitable where the goods are made according to customers’ orders, production is intermittent and customers’ orders can be identified in the value of production.

Difference # Process Costing:

1. Production is in continuous flow; the products being homogeneous.

2. Costs are compiled for each process for department on time basis i.e., for production of a given accounting period.

3. Products lose their individual entity as they are manufactured in a continuous flow.

4. The total cost of each process is divided by the total production for the process to calculate the average cost per unit for the period.

5. Costs are calculated at the end of the cost period.

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6. Transfer of costs from one process to another is made, as the product moves from one process to another.

7. There is always some work-in-process at the beginning as well as at the end of the accounting period.

8. Proper control is comparatively easier as the production is standardised and is more stable.

9. Process costing requires few forms and less details but a closer analysis of operations is needed.

10. Job costing is suitably employed where goods are made for stock and production is continuous or goods although made to customer’s order are, owing to the continuous nature of the production, lost sight in the volume of production.